May 7, 2002
Contact: Mark Anderson (509-963-1493/fax 509-963-2301/e-mail andemark@cwu.edu)
ELLENSBURG, Wash. - By studying beef prices, Central Washington University student Rhett Hoffmeister hopes to help the rancher.
“For the small-time cattle rancher, this research will give them the means to better analyze a given market at any given time and determine whether it is a good time to sell,” Hoffmeister said. “For beef buyers, this information will give them a clearer look into the future buying desires of the consumers and whether they should purchase calves for future consumption.”
Hoffmeister, a senior business administration major, will present his findings at CWU’s 7th annual Symposium on Undergraduate Research and Creative Expression (SOURCE) Thursday, May 16, in the science building on Central’s Ellensburg campus.
Hoffmeister said economic factors are just one reason for fluctuations in beef prices. When unemployment is high, people buy cheaper foods such as soy burgers or chicken, he explained.
“With the economy going as it is now, it’s hard to tell what will happen,” according to Hoffmeister, who grew up on a family farm near Ephrata. “The beef market has been in a slump for about a year and a half, and it’s estimated that will continue for another five years.”
Also, the supply is down right now, partly because of a big sale in the Texas market, he said. Demand is down, as well. Being more health conscious, the American consumer is buying more white meat.
As a result, grocery stores must find a balance and try to predict consumer buying habits. If a store purchases too much beef, they might put it on sale before it goes bad.
Overall though, Hoffmeister said, “Americans are hooked on beef.”
With first-hand experience at buying and selling cattle, he found there is no way to predict prices. A few years ago he and his brother bought 36 head, later selling half at a profit. When they sold the remaining half, it was at a loss.
Hoffmeister started his research project, “Determinants of Beef Price: An Empirical Investigation of Calf Sales in the State of Washington,” in a statistics class with CWU business professor C. Christopher Lee. Along with library and Internet research, he talked with farmers and collected sample data from 100 calves from the Quincy auction.
With a multiple regression model employed in the study, the dependent variable is price per pound. Independent variables include age, color, weight, gender and type of cattle.
He said most small ranchers don’t have methods for determining the price of beef, and some are scared off by the word “statistics.” Others rely on unfounded traditions. He hopes to help them better understand beef pricing.
Hoffmeister will graduate in August. He learned to speak Portuguese while serving a mission in Brazil for the Church of Jesus Christ of Latter-day Saints, and is considering a job that would combine his business and language skills.
